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2/29/2012 @ 11:51AM12,229 views

Moving To The SEC Will Pay Off For Missouri, Texas A&M

Missouri and Texas A&M are splitting from the Big 12 in order to join the SEC next season. The schools are following in the footsteps of Colorado and Nebraska, which left the Big 12 last year for the Pac-12 and Big Ten, respectively. The move is a costly one, and Missouri and Texas A&M will have to part with a combined $25.3 million in order to leave their conference.

The $12.4 million that Texas A&M is leaving behind comprises roughly one-third of the $45 million generated by its football team in 2010. But the move is well worth the payout, as the SEC offers far greater opportunities for the school to profit on college athletics.

The SEC’s current television contracts with CBS and Disney-owned ESPN bring in an annual $205 million, whereas the Big 12′s contracts with ESPN and News Corp.’s Fox generate just $150 million each year. The addition of Missouri and Texas A&M will diminish each SEC team’s share of conference revenue, but the difference in contract values highlights the increased value of playing in the SEC. In fact, eight SEC teams appeared on our annual ranking of College Football’s Most Valuable Teams, compared to just three teams from the Big 12.

The level of on-field success is also far greater in the SEC, which pays off to the tune of millions in terms of bowl game revenue. Last season, for instance, the Big 12 and SEC each sent eight teams to a bowl game, but teams from the SEC played in more prestigious bowls. The SEC received roughly $76 million in bowl payouts, 46% more than the $52 million earned by the Big 12. Also consider that the SEC has been represented in every National Championship Game since 2007 and has had 12 teams go to a BCS bowl in the same time period. The Big 12 has sent only eight teams to BCS bowls since 2007. The difference is quite significant, given that each BCS bowl appearance is worth over $18 million.

Television and bowl game revenue are far greater in the SEC, and that doesn’t even begin to touch on the benefits of the SEC’s rabid fans. A greater fan presence, both at games and watching on TV, means that Missouri and Texas A&M will have better opportunities for marketing and sponsorships. It may take a few years for Missouri and Texas A&M to earn back their $25.3 million, but it’s a price worth paying for access to the SEC’s vast earning opportunities.

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“The SEC’s current television contracts with CBS and Disney-owned ESPN bring in an annual $205 million, whereas the Big 12′s contracts with ESPN and News Corp.’s Fox generate just $150 million each year.”

$205 mil/16 teams = $12.8 mill; $150 mill/10 teams = $15 mill

“The SEC received roughly $76 million in bowl payouts, 46% more than the $52 million earned by the Big 12.”

Trey: That’s a closer approximation, but if we are trying to determine how much either school stands to gain by staying or leaving, then we should consider the Big 12 as an 11-school conference (thanks to the addition of TCU and WVU next year). Which makes it:

That’s an additional $1.7 million for each school just from those two revenue streams alone. Also remember that the SEC now has added leverage to renegotiate its television contracts thanks to Mizzou and A&M fans, so this gap may climb further still.

I was calculating what either Texas A&M or Missouri would get in each conference, so TAMU/Mizzou is the 11th school in question. And while you’re right that the Big 12 now has a new TV deal, the SEC is also in the process of renegotiating its deal with CBS, and it’s almost a certainty that the new deal will be college football’s most valuable TV contract. I seriously doubt TAMU/Mizzou will be regretting the decision anytime soon.

You are forgetting the extra cost of travel for the teams and those “Rabid fans”. The big sports will do OK but it will kill all other sports. How long before they decide it’s not worth it to send the swimming team to Florida? Missouri will be regretting this decision very soon.

Good point, Cory. Travel expenses will definitely increase, especially for Missouri. It was reported that Nebraska’s travel expenses for football increased by about $1 million when it moved to the Big Ten last year.

Having said that, most schools are already losing money from non-basketball/football athletics. For instance, Missouri lost roughly $3.7 million from all of its non-basketball/football teams combined last year. Basketball/football revenue is generally used to cover the losses, and I expect that increased revenue from joining the SEC will help lighten the burden of greater travel expenses.

It’s not just the cost for the university and the teams but the fans. One of the best things about the big 12 was the storied rivalries and how the fans could travel to see them. Breaking up those rivalries and increasing the cost of attending the games at the same time does not make sense. Combine that with two teams that are mediocre at best and I just don’t see the positives of the move.

All very strong arguments, and I agree that local fans are hurt in terms of going to away games against long-time rivals. The only big rivalry that the move helps (that comes to mind, at least) is between Arkansas and Texas A&M – but the two schools had already started playing the Southwest Classic again in 2009, so the conference switch wasn’t really necessary for that.